Israel PM Netanyahu 'reaches coalition deal'

The Israeli Prime Minister Benjamin Netanyahu has reached a deal to form a coalition government, officials say.

His Likud-Yisrael Beitenu party list will form a coalition with the centrist Yesh Atid and Hatnua and the far-right Jewish Home.

Mr Netanyahu was forced to give up his alliance with the ultra-Orthodox parties: Shas and United Torah Judaism.

It took five weeks to reach deals with his new partners after the general election on 22 January.

"There is a government," Likud spokeswoman Noga Katz was quoted as saying by Reuters news agency.

On his Facebook page, Yair Lapid, the leader of Yesh Atid, says the coalition agreement will be signed "probably tonight".

Talks on the size and shape of the cabinet went on late into Wednesday night between Likud and its two main coalition partners, Yesh Atid and Jewish Home.

Apart from the prime minister, there will be 21 ministers, making it the smallest government in decades, Israeli media report. Yesh Atid is expected to be responsible for finance and education and Likud will run the interior ministry.

Once the deal is signed, it will have to be approved by the Israeli parliament or Knesset and sworn in.

Adding to the time pressure is a visit by the United States President Barack Obama scheduled to begin on 20 March.

It will be his first trip to Israel, the Palestinian territories and Jordan since being elected president in 2008.

Netanyahu weaker

Yesh Atid has secured five ministerial portfolios, while Jewish Home parties will have three, reports say.

Likud and Yisrael Beitenu, which formed an alliance ahead of the vote, saw their position in the Knesset weakened by the vote.

They lost a quarter of their 42 seats, leaving them with 31 out of 120.

Yesh Atid took 19 seats and Jewish Home, led by Naftali Bennett, finished in fourth place with 12.

The two men formed a pact in coalition talks and got commitments to a new draft law that will compel more ultra-Orthodox men to perform national military service or other civilian duties.

Sharing the "social burden", as it is known, was a hot political issue in the last election.

Many secular Israelis object to the exemptions from army service given to students at religious seminaries or yeshivas and the large state subsidies that their institutions receive.

Cabinet line-up

In the new cabinet, it is believed Mr Lapid - a former TV presenter - will be finance minister and Mr Bennett, a high-tech millionaire, will be economic and trade minister.

Yesh Atid and Jewish Home stuck to a pact in coalition talks with Mr Netanyahu

After tough negotiations it was apparently decided that Mr Lapid's deputy, Rabbi Shai Piron would take the education portfolio while Likud would have the interior ministry.

Mr Netanyahu is expected to act as foreign minister while Avigdor Lieberman, who leads his partner Yisrael Beitenu, faces charges of fraud and breach of trust in a trial.

The defence ministry will be headed by former IDF chief of staff, Moshe Yaalon, a member of Likud.

Tzipi Livni, whose Hatnua party holds six seats, will be justice minister and chief negotiator in talks with the Palestinians.

In total Mr Netanyahu will control 68 Knesset seats.

The opposition will consist of Labour, the third biggest party in the parliament with 15 seats, the ultra-Orthodox and Arab parties and centrist Kadima.

One of the first challenges for the new government will be passing the 2013 budget which will include austerity measures. Mr Netanyahu called for an early election last October because he said that bickering among his coalition partners made it impossible to pass a "responsible budget".

Talks with Mr Obama next week are expected to focus on Iran's nuclear weapons programme, the war in neighbouring Syria and efforts to revive peace talks with the Palestinians.